Jon Russell was Asia Editor for The Next Web from 2011 to 2014. Originally from the UK, he lives in Bangkok, Thailand. You can find him on T Jon Russell was Asia Editor for The Next Web from 2011 to 2014. Originally from the UK, he lives in Bangkok, Thailand. You can find him on Twitter, Angel List, LinkedIn.
Sharp is on the rocks right now, there’s little doubt in that, and its biggest hope for a revival lies in the hands on Hon Hai — the parent company of Apple partner Foxconn — and it looks like this week is d-time for a mooted deal between the companies. Takashi Okuda, president of the troubled Japanese company, is reportedly set to travel to Taiwan this week in a bid to finally thrash out the long-running deal, Japanese media cited by Reuters reports.
The proposed deal will see Hon Hai take a 9.9 percent investment in Sharp in what would be a massive boost and injection of capital and impetus. In addition to laying off 5,000 staff, the company recently introduced a voluntary redundancy program and is tipped to sell off more than $1 billion in assets to fund refinancing initiatives.
The agreement looked in jeopardy last week after Hon Hai supremo Terry Gou ended a visit to Japan a day earlier than scheduled, cancelling a meeting with Sharp executives in the process and leaving the country without a confirmed deal. Sharp’s share price crashed 12.8 percent on Friday as a result, and it’s of little surprise to hear that the firm is intending to fly out to Hon Hai’s base in Taiwan to pick things up, although a spokesperson was unable to confirm the plans.
“We can’t disclose our executives’ schedule, but we are hoping to settle the negotiations as early as possible,” Sharp’s Miyuki Nakayama told Reuters.
The exact terms of the deal remain unconfirmed and it’s important to note that recent speculation had suggested that Hon Hai would renegade on the original specifics given Sharp’s continually worsening financial state. Speaking during his stay Japan last week however, Gou indicated that the terms of the original deal had not changed – despite the Taiwanese government suggesting it was “pricey.”
Despite its woes and struggle to compete in the chip making market, Sharp is a key supplier of Apple’s devices. With the next iPhone tipped to be unveiled in September, the investment is seen as strengthening Sharp and helping to ensure that Apple’s iPhone supply chain remains robust in the face of what’s likely to be intense demand for the device.
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